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I am a Practitioner of 'The 7e Way of Leaders' where a Leader will Envision, Enable (ASK for TOP D), Empower, Execute, Energize, and Evolve grounded on ETHICS!

Wednesday, June 20, 2018

Daily Lessons from Life 19 June 2018 - Real trade war coming?

"Trump threatens extra tariffs on US$200b of Chinese goods

WASHINGTON: U.S. President Donald Trump threatened to impose a 10 per cent tariff on US$200 billion of Chinese goods and Beijing warned it would retaliate, in a rapid escalation of the trade conflict between the world's two biggest economies.
Trump's latest move, as Washington fights trade battles on several fronts, was unexpectedly swift and sharp.
It was retaliation, he said, for China's decision to raise tariffs on $50 billion in U.S. goods, which came after Trump announced similar tariffs on Chinese goods on Friday (Jun 15).
China imported $129.89 billion of U.S. goods last year, while the U.S. purchased $505.47 billion of Chinese products, according to U.S. data.
Derek Scissors, a China scholar at the American Enterprise Institute, a Washington think tank, said that means China will soon run out of imports of U.S. goods on which to impose retaliatory tariffs.
China was unlikely change its industrial policies in response to the U.S. trade threats, he said. That could take a long and painful trade fight.
"As I've said from the beginning, China will back off its industrial plans only when U.S. trade measures are large and lasting enough to threaten the influx of foreign exchange. Not due to announcements," he said."
The key words r: China imports MUCH less than its export to the USA. There goes its power of negotiation!! It is that simple if hard balls r played!!
If Trump's complaints abt how china is forcing US companies to "share" their IPs through coercion in exchange for their access to the Chinese market is TRUE, there is no reasonable excuses for china to fall back on.
It just revealed the jey weaknesses of China technologies development. It has to continue to pay a premiums for the US technologies it does not possess while accelerte its own home grown technologies.
Those companies that hv significant businesses in both countries will lose out big time! While those that focused on the respective domestic market will survive the trade war!
Of course growth will disappear, just surviving is already great performance in that trade war situation!!
Will the threats from BOTH sides really get carried out? Still uncertain! Let's hope it would happen!!

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